Due to the electricity settlement reform, suppliers are incentivised to purchase energy to meet their customers’ demand, per each half-hour, per day. Accurate and timely half-hourly consumption data, obtained via smart metering, is likely to greatly improve the quality of settlement. This is expected to encourage innovation and the effective use of energy.

According to Ofgem, using half-hourly consumption data from smart meters and automated meter readings (AMR) is in the consumers’ best interests. As a result, Ofgem has launched a Significant Code Review (SCR) which presents a timetable for delivery of market-wide half-hourly settlement. Currently, five options are being explored, known as Target Operating Models (TOMs). TOMs seek to create a settlement process which is both simple and accurate while facilitating innovation based on Design Principles prescribed by Ofgem.

This initiative will be a major industry programme, delivering a modernised settlement regime, intended for a smarter energy market.